Teranga agm webcast final

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Teranga agm webcast final

  1. 1. PRODUCINGANDEXPLORING2012 ANNUAL GENERALMEETING OF SHAREHOLDERS 1
  2. 2. 2012 ANNUAL GENERAL MEETING OFSHAREHOLDERS FOCUSED ON GROWTHAlan R. Hill Chairman & CEO FOCUSED ON:Richard Young President & CFO GROWING RESERVES GROWING PRODUCTION FINANCIAL STRENGTH 2
  3. 3. CAUTIONARY STATEMENTThis presentation contains forward looking information, within the meaning of applicable Canadian securities legislation, and forward looking statements, within themeaning of applicable United States securities legislation, which reflects management’s expectations regarding Teranga Gold Corporation’s (“Teranga” or the“Company”) future growth, results of operations (including, without limitation, future production and capital expenditures), performance (both operational andfinancial) and business prospects (including the timing and development of new deposits and the success of exploration activities) and opportunities. Whereverpossible, words such as “plans”, “expects”, “does not expect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”,“intend” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, havebeen used to identify such forward looking information. Although the forward looking information contained in this presentation reflect management’s current beliefsbased upon information currently available to management and based upon what management believes to be reasonable assumptions, Teranga cannot be certainthat actual results will be consistent with such forward looking information. A number of factors could cause actual results, performance or achievements to differmaterially from the results expressed or implied in the forward looking information, including those listed in the “Risk Factors” section of the prospectus of Teranga,dated November 11, 2010 (the “Prospectus”). These factors should be considered carefully and prospective investors should not place undue reliance on theforward looking information. Forward looking information necessarily involves significant known and unknown risks, assumptions and uncertainties that may causeTeranga’s actual results, performance, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward lookinginformation. Although Teranga has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from thosedescribed in the forward looking information, there may be other factors and risks that cause actions, events or results not to be as anticipated, estimated orintended. There can be no assurance that the forward looking information will prove to be accurate, as actual results and future events could differ materially fromthose anticipated in such statements. Accordingly, prospective investors should not place undue reliance on such forward looking information. Teranga expresslydisclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise, exceptin accordance with applicable securities law.Forward looking information and other information contained herein concerning mineral exploration and management’s general expectations concerning themineral exploration industry are based on estimates prepared by management using data from publicly available industry sources as well as from market researchand industry analysis and on assumptions based on data and knowledge of this industry which management believes to be reasonable. However, this data isinherently imprecise, although generally indicative of relative market positions, market shares and performance characteristics. While management is not aware ofany misstatements regarding any industry data presented herein, mineral exploration involves risks and uncertainties and industry data is subject to change basedon various factors.In addition, please note that statements relating to “reserves” or “resources” are deemed to be forward looking information as they involve the implied assessment,based on certain estimates and assumptions, that the resources and reserves described can be profitably mined in the future. While management has confidencein its projections based on exploration work done to date, the potential quantity and grade disclosed herein is conceptual in nature, and there has been insufficientexploration to define a mineral resource, therefore it is uncertain if further exploration will result in the targets being delineated as a mineral resource.This presentation does not constitute in any way an offer or invitation to subscribe for securities in Teranga pursuant to the Corporations Act 2001 (Cth) and hasnot been lodged with the Australian Securities and Investment Commission. 3
  4. 4. TERANGA – YEAR ONE FOCUSED ON GROWTH • 2011 prepared us for increasing production and lowering costs and increasing cash margins as we move forward FOCUSED ON: • Continue to self-fund extensive exploration program GROWING RESERVES • Very encouraging drill results on Mine License GROWING PRODUCTION • Goal: double gold inventory on Mine License alone FINANCIAL STRENGTH • Promising results on Regional Exploration Program 4
  5. 5. OPERATING HIGHLIGHTS Fiscal 2011(1) • 147,728 oz’s produced • 153,728 oz’s sold at cash cost of $872/oz Calendar 2011 • 131,461 oz’s produced • 137,136 oz’s sold at cash cost of $900/oz • In line with revised guidance • Costs affected by higher fuel, labour and maintenance costs(1) Fiscal year is from October 1, 2010 to December 31, 2011, a 15 month year. Teranga has converted from a June30 to calendar year end. 5
  6. 6. FINANCIAL HIGHLIGHTSRevenue for the fiscal 2011: • $187M • 47% of oz’s delivered into the forward sales contracts at $846/oz • 53% of oz’s delivered into the spot market at an average priced of $1,537/oz • $1,213/oz – average realized price 6
  7. 7. FINANCIAL HIGHLIGHTSNet loss for the fiscal 2011: • $15.8M or $0.09/share • Affected by deliveries into hedge book, high exploration costs, and stock based compensation expenseCapital expenditure: • For the fiscal year: $76.4M • Primarily for mill expansion, mobile equipment, and capitalized mine site exploration 7
  8. 8. FINANCIAL HIGHLIGHTS Cash position*: • $11M at December 31, 2011 • $26.5M at January 31, 2012 • Sufficient cash + expected future cash flows support liquidity requirements • Additional flexibility – deferred delivery of 28,000 oz’s due in Q1 to second half ‘12 • Rebuild cash balance • Maintain cash balance of ~$20M • Consider revolving finance facility*Cash, cash equivalents and short term investments including restricted cash 8
  9. 9. FINANCIAL HIGHLIGHTSPlant expansion: • Doubling mill capacity to ~4 Mtpa • The new mill will be commissioned in the second week of April • Expected total cost of $62M • $15M remaining to be spent in 2012 9
  10. 10. FINANCIAL HIGHLIGHTSGold Sales Contracts: • Unrealized non-cash gain of $1.8M for the 15 months ended December 31, 2011 • 174,500 oz’s remain under hedge contract • Expect to have 66,000 oz’s remaining at year end (final delivery August 2013) • Objective to eliminate hedge position as quickly but prudently as possible 10
  11. 11. FINANCIAL HIGHLIGHTSMobile equipment loan facility: • December quarter – expansion of mobile equipment loan with Société Générale – additional $12.8M • Final payment on September 30, 2013 • Currently drawn down to $24.4M 11
  12. 12. FOCUSED ON BUILDING Cash Margin ($/oz)(2,3)FINANCIAL STRENGTH 1200Outlook – 2012 1000 800 • 210,000 – 225,000 oz’s at cash costs of $600 - $650/oz(1) 600 • Rising production, lowering costs 400 200 • Margin expansion + increased production profile = significant free cash flow to self-fund 0 exploration and development strategy 2011 2012 2013* 2014 Rate of margin expansion is a function of increasing production through regional • Manageable capex requirements in 2012: $30M* exploration success *After eliminating hedge position(1) This production target is based on existing proven and probable reserves only.(2) Assumes $1600/oz gold price and cash cost of $625/oz (3) Non-Deferred Hedge Schedule page 39 12*Excluding Mine License exploration costs
  13. 13. 2011 OPERATIONALHIGHLIGHTS FOCUSEDChanges made to reduce operating risks: ON GROWTH • Automated controls for better blending to FOCUSED ON: increase throughput • Second access ramp to the pit GROWING RESERVES • Revised drilling, blasting, and maintenance contracts in order to increase mining rate GROWING PRODUCTION • Improvements to employee compensation FINANCIAL STRENGTH 13
  14. 14. FOCUSED ON Kedougou-Kenieba Inlier – A Birimian Greenstone BeltGROWING RESERVES Reserves and Resources(1,2) December 31, 2011 2.50 2.00 1.50 M oz 1.00 2.14 1.66 1.51 0.50 0.00 Proven and Measured and Inferred Probable Indicated Resources Reserves Resources(1) See page 38 (2) M+I Resources are inclusive of reserves 14
  15. 15. FOCUSED ONGROWING RESERVES2012 Exploration Program1. Mine License Exploration: $20M (77,000m)2. Regional Exploration: $20M (90,000m) TOTAL: $40M (167,000m) (+140,000m RAB)2011 Exploration Program: $46MFull drill results are posted at terangagold.com 15
  16. 16. 1. MINE LICENSE EXPLORATION 2. REGIONAL EXPLORATION 33km2 1,500km2 35 km radius 16
  17. 17. 1. SABODALA MINE LICENSEEXPLORATION• $20M exploration program underway on the Sabodala Mine License• Potential to expand gold inventory on the ML from 1.55M oz to 2.5 – 3.5M oz(1,2,3) over 12 to 18 months increasing the mine life to ~ 10 to 15 years From: • Deepening the Sabodala pit to the north along the Main Flat Extension • Continuation of the Masato deposit • Conversion of Niakafiri resources to reserves(1) Potential to expand existing gold mineralization to between 40 and 50 M tonnes at grades of between 1.5 to 2.0 gpt Au for a total inventory of 2.5 to 3.5M oz(2) This exploration target is not a Mineral Resource. The potential quality and grade is conceptual in nature and there has been insufficient exploration to define a Mineral Resource. It is uncertain if further exploration will result in the determination of a Mineral Resource. 17(3) See Key Assumptions on page 37
  18. 18. 2011 MINE LICENSEEXPLORATION HIGHLIGHTS FOCUSED ON GROWTH• Intersection of significant widths of high grade mineralization outside the Sabodala ultimate pit limit as part of MFE drill program FOCUSED ON:• Discovery of multiple high-grade zones in the LFZ just below the MFE area GROWING RESERVES• Successful intersection and extension of the Masato deposit down dip onto our Mine License and 200m down dip and 500m along strike with potentially underground mineable high-grade ore 18
  19. 19. 2012 MINE LICENSEEXPLORATION FOCUSED• Minimum 6 drill rigs ON GROWTH FOCUSED ON:• $20M GROWING• 77,000m of diamond and RC drilling RESERVES 19
  20. 20. MINE LICENSE EXPLORATION – SABODALA Main Flat Extension (“MFE”) – principal gold hosts of Sabodala deposit • MFE program is designed to test the continuity of this structure to the north beginning with infilling holes • Significant widths of high grade mineralization: SBDH141D – 131m at 3.45 gpt SBDH143D – 87m at 3.11 gpt SBDH147D – 49m at 2.2 gpt SBDH157D – 53m at 4.5 gpt SBDH160DD – 70m at 3.0 gpt SBDH161D – 85m at 3.0 gpt Lower Flat Zone (“LFZ”) – deeper zone below MFE • Drilling confirms multiple flat zones immediately below Sabodala ultimate pit: SBDH160DD – 27m at 3.6 gpt SBDH161D – 11m at 7.2 gpt SBDH170DD – 34m at 6.3 gpt SBDH171DD – 46m at 9.8 gpt (1) MFE - open pit mineable gold inventory at an average grade between 1.5 – 2.0 gpt, LFZ potentially a similar amount to lower/underground at an average grade between 3.0 and 4.0 gpt, in 2012Full drill results are posted at terangagold.com 20
  21. 21. LONG SECTION OF SABODALA GOLD DEPOSIT 21
  22. 22. MINE LICENSE EXPLORATION –SABODALA PIT FOCUSEDINCREASED OBJECTIVES: ON GROWTH • Sabodala pit (MFE/LFZ) objective over next 18 FOCUSED ON: months • Previous open pit objective GROWING • To add 250,000 – 500,000 oz’s RESERVES • New open pit objective • To add 500,000 – 1,000,000 oz’s • Larger pit • Add to underground gold inventory 22
  23. 23. MINE LICENSE EXPLORATION – MASATO Masato structural trend strikes across onto our Mine License Main Flat Extension • Oromin Joint Venture has identified open pit reserves of 0.5M oz about 2km from our mill • Tracking the deposit as it crosses onto our Masato Down Dip property Sabodala Pit • Multiple mineralized zones have been identified Sambaya Hill with high grade intervals apparent • Confirmed strike length of 500m, a dip extent of Masato Extensions 200m, and a band of about 40m of solid grade mineralization • 2km of strike length still to be tested • Recent results from Masato Down Dip include: 37m at 4.5 gpt 44m at 2.0 gpt Full drill results are posted at terangagold.com 23
  24. 24. MINE LICENSE EXPLORATION – NIAKAFIRI Niakafiri area has ~300,000 oz’s in reserves in a mineralized envelope of about ~800,000 oz’s • Deposit remains open below 200m level • Potential 2H 2012 drilling with intentions of adding to reserves • Ongoing community discussions Full drill results are posted at terangagold.com 24
  25. 25. 1. MINE LICENSE EXPLORATION 2. REGIONAL EXPLORATION 33km2 1,500km2 35 km radius 25
  26. 26. 2. REGIONAL EXPLORATION• From 2007 – 2009, no significant drilling was done on the 1,455km2 Regional Land Package due to cash constraints• There are ~40 drill targets identified; $32M spent in 2011 and $20M planned for 2012• Addition of Garaboureya North exploration permit, land package increases to ~1,500km2 26
  27. 27. GORA • Current reserves of 114,000 oz’s at 5 gpt • Most advanced target: moving from exploration to development • Objective of having production in early 2013 permitting dependent • 22km from Sabodala mill, truckable • High grade-drill intersections continue to expand the potential footprint of the deposit Trace of blind veins from RC holes Projected to surface – high correlation with IP trends.Full drill results are posted at terangagold.com 27
  28. 28. TOUMBOUMBA – NEWEST TARGET • Latest discovery, potential to become second regional deposit through the mill • Located 10km NW from Sabodala mill • High grade, lower grade halo, and oxide material • Easily processing at minimum, potential for heap leaching • Alteration hosted mostly in granite (laterite cover) • Oxide mineralization of up to 60m in depth • RAB results: • 6m at 18.54 gpt • 4m at 3.31 gpt • 8m at 5.46 gpt • RC results: • 1m at 5.20 gpt • 2m at 21.45 gpt Full drill results are posted at terangagold.com • 4m at 6.32 gpt 28
  29. 29. DIEGOUN NORTH – “THE DONUT” • 7km x 4km complex of gold anomalism • Contrasting rock types, porphyries, granites, dolerite & sediments Sabodala Ore Body • Rock samples to 80 gpt Au • RAB drilling has defined gold mineralization in bedrock • Honey and Jam • First pass RC program at Honey and Jam; 51 holes completed for just under 8,800m (51 holes anomalous levels of gold > 0.1 gpt; 40 holes were >0.5 gpt) • Recognition of a well-developed, auriferous NE trending structureFull drill results are posted at terangagold.com • 2012 drilling to focus on understanding ore-grade structural controls and orientations 29
  30. 30. • >5km long, up to 1 km wide gold anomaly defined byTOUROKHOTO termite sampling, similar geology as Loulo across the border (12M oz resource) Sabodala Ore Body • Drilling to date has identified a substantial, mineralization system • Potential to host-ore grade shoots within • First pass drill program is designed to test for large, near surface open-pitable resource • Parallels NE trending shears of the MTZ • 3M oz Massawa deposit hosted on MTZ about 25km south Full drill results are posted at terangagold.com 30
  31. 31. OUR VISIONTo become a preeminent gold producer in West Africa while setting the benchmarkfor responsible miningPhase 1: Become a mid-tier gold producer in Senegal with 250,000 to 350,000 ounces(1) of annual gold production with existing infrastructurePhase 2: Increase annual gold production to 400,000 to 500,000 ounces(1) (1) See page 37 and 38 31
  32. 32. CORPORATESOCIAL RESPONSIBILITY• CSR is fundamental to the success of our business• Healthy, safety, education, sustainability• Developing schools, health clinics, and improving access to potable water• Engaged a renowned Canadian group to assist us in putting together a comprehensive regional development plan • Along with local, regional, and national government• Improve the livelihoods of those in the communities in which we operate• A key component of our vision is to set the benchmark in Senegal for responsible miningMining Responsibly and Sharing theBenefits 32
  33. 33. 5 YEAR GOLD PRICE 2000 FOCUSED ON GROWTH 1800 1600 FOCUSED ON: 1400$/oz 1200 GROWING RESERVES 1000 GROWING 800 PRODUCTION 600 FINANCIAL STRENGTH 400 2007 2008 2009 2010 2011 33
  34. 34. SUMMARY –FOCUSED ONGROWTH1. Only mill in Senegal – expansion almost complete2. Largest land position in Senegal3. Rising production, declining costs4. Building a stronger balance sheet – increasing production and free cash flow with margin expansion5. Extensive exploration program6. Experienced management team 34
  35. 35. PRODUCINGANDEXPLORING2012 ANNUAL GENERALMEETING OF SHAREHOLDERS 35
  36. 36. APPENDICES 36
  37. 37. KEY ASSUMPTIONSBasis for 2.5 – 3.5M oz gold inventory from Mine License Expand upon existing gold mineralization by an additional 20M to 30M tonnes at grades of between 1.5 and 2.0 gpt for a total inventory of 2.5 to 3.5M oz from the Sabodala Mining License (“ML”) over the next 12 to 18 months. The larger gold inventory base is expected to result from the success of deepening the Sabodala pit to the north along the MFE/LFZ, extension of the Masato pit onto the ML, potential conversion of Niakafiri resources to reserves as well as adding to the gold mineralization inventory below these three large open pits. This exploration target is not a Mineral Resource. The potential quantity and grade disclosed herein is conceptual in nature, and there has been insufficient exploration to define a Mineral Resource, therefore it is uncertain if further exploration will result in the targets being delineated as a Mineral Resource. The goal of the MFE/LFZ programs is to add 500,000 to 1,000,000 ounces of gold to the open pit mineable gold inventory at an average grade between 1.5 – 2.0 gpt, as well as adding underground gold inventory at an average grade between 3.0 and 4.0 gpt.Rationale: Recent drilling confirms extension of mineralization to the north of the existing pit Potential for identification of additional ounces through infill drilling within area of existing resources under the ML Minimum 5 drill rigs and exploration budget of US$20M dedicated to ML alone in 2012 Program to continue to test similar geophysical anomalies and identified structures within the ML 37
  38. 38. SABODALA GOLD PROJECT: RESERVES & RESOURCES(DECEMBER 31, 2011) M Grade M oz tonnes g/t Au Au Proven and Probable Sabodala 19.89 1.54 0.987 Niakafiri 7.814 1.14 0.287 Stockpile 4.211 0.94 0.128 Subtotal 31.915 1.37 1.402 Sutuba 0.353 1.06 0.012 Gora 0.709 5.01 0.114 Sabodala - additional 3.232 1.26 0.131 Total 36.209 1.43 1.659 Measured and Indicated Sabodala 44.371 1.07 1.525 Niakafiri 10.741 1.12 0.386 Gora 1.282 5.22 0.215 Sutuba 0.353 1.06 0.012 Total 56.747 1.17 2.138 Inferred Sabodala 26.205 1.01 0.848 Niakafiri 7.248 0.88 0.205 Niakafiri West 7.144 0.82 0.188 Soukhoto 0.566 1.32 0.024 Gora 0.286 4.16 0.038 Diadiako 2.917 1.49 0.119 Majiva 2.593 0.64 0.047 Toumboumba 0.855 1.5 0.041 Total 47.814 0.98 1.51 38
  39. 39. NON-DEFERRED HEDGE SCHEDULEDELIVERY DATE PRICE U.S.$/OZ OUNCES 17-May-12 846 28,000 15-Aug-12 838.33 41,500 21-Nov-12 829.45 39,000 20-Feb-13 832.92 25,000 17-May-13 790.66 25,000 21-Aug-13 791.5 16,000 TOTAL 826 174,500 39
  40. 40. MANAGEMENTAlan R. Hill • Mining engineer with over 20 years experience globally in project evaluations, acquisitions and mine development as Executive VP of Barrick GoldExecutive Chairman & CEO • Currently a Director of Gold Fields • Former President and CEO of Gabriel Resources (2005 – 2009) and non-Executive Chairman of Alamos Gold (2004 – 2007)Richard S. Young • Over 10 years experience in mining finance, development, corporate development, and investor relations with Barrick GoldPresident & CFO • Former VP and CFO of Gabriel Resources (2005 – 2010)Yani Roditis • Over 10 years experience in mine development and operations with Barrick Gold (1994 – 2005) • Former Chief Operating Officer of Gabriel Resources (2005 – 2010)Vice President, OperationsKathy Sipos • 10 years experience in Corporate Communications and Investor Relations with Barrick Gold (1996 – 2006) • Former VP of Corporate Communications and Investor Relations of Gabriel Resources (2006 – 2009)Vice President, Investor &Stakeholder RelationsDavid Savarie • Over 10 years experience in the legal industry • Former Deputy General Counsel and Corporate Secretary of Gabriel ResourcesVice President, General Counsel & • Previously in private practice at Miller Thomson LLPCorporate SecretaryMark English • Over 24 years experience in the gold mining industry • Previously worked for several companies in Australia, East and West Africa being involved in operating minesGeneral Manager and development, inclusive of greenfield start-ups • Joined Mineral Deposits Ltd. in June 2006Bruce Van Brunt • Mining engineer and geologist with over 20 years experience • Previously worked in a number of technical capacities with Placer Dome and Echo Bay MinesBusiness Development Manager • Joined Mineral Deposits Ltd. in March 2006Martin Pawlitschek • Geologist with over 15 years experience in the mining industry • Previously spent 11 years at BHP and a number of smaller exploration companies, working in Australia, SouthRegional Exploration Manager East Asia and Africa • Joined Mineral Deposits Ltd. in July 2007 40
  41. 41. COMPETENT PERSONS STATEMENTThe information in this presentation relating to the reserve estimate associated with the Sabodala and Niakafiri pits as well as the Stockpiles is based oninformation compiled by Ms. Julia Martin, PEng, MAusIMM (CP) who is a full time employee of AMC Mining Consultants Canada and has sufficient experiencewhich is relevant to the style of mineralisation and type of deposit under consideration and to the activity which she is undertaking to qualify as a "CompetentPerson" as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Ms. Martin is aQualified Person in accordance with NI 43-101 and consents to the inclusion in the report of the matters based on his information in the form and context in which itappears.The information in this presentation relating to the reserve estimate for Sutuba, Gora and the additional reserves from the Sabodala pit as well as information inthis presentation relating to exploration results and targets on the Sabodala Mining License are based on information compiled by Mr. Bruce Van Brunt, who is aFellow of the Australasian Institute of Mining and Metallurgy. Mr. Van Brunt is a full time employee of Teranga and not independent. Mr. Van Brunt has sufficientexperience relevant to the style of mineralization and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person asdefined in the 2004 Edition of the “Australasian Code of Report of exploration Results, Mineral Resources and Ore Reserves” and as defined in NI 43-101. Mr.Van Brunt consents to the inclusion of this information in the form and context in which it appears in this presentation.The information in this presentation relating to the exploration results and targets within the Regional Exploration Program are based on information compiled byMr. Martin Pawlitschek, who is a member of the Australian Institute of Geoscientists. Mr. Pawlitschek is a full time employee of Teranga and not independent. Mr.Pawlitschek has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity he is undertaking to qualifyas a Competent Person as defined in the 2004 Edition of the “Australasian Code of Report of exploration Results, Mineral Resources and Ore Reserves” and asdefined in NI 43-101. Mr. Pawlitschek consents to the inclusion of this information in the form and context in which it appears in this presentation. 41

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